BOSTON ( TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,800 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.
TheStreet Ratings released rating changes on 53 U.S. common stocks for week ending September 23, 2011. 16 stocks were upgraded and 37 stocks were downgraded by our stock model.
Rating Change #10
Rightnow Technologies (RNOW) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 26.2%. Since the same quarter one year prior, revenues rose by 26.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Internet Software & Services industry and the overall market, RIGHTNOW TECHNOLOGIES INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The gross profit margin for RIGHTNOW TECHNOLOGIES INC is currently very high, coming in at 74.80%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RNOW's net profit margin of 0.40% significantly trails the industry average.
- Net operating cash flow has significantly increased by 59.95% to $6.42 million when compared to the same quarter last year. Despite an increase in cash flow, RIGHTNOW TECHNOLOGIES INC's average is still marginally south of the industry average growth rate of 60.18%.
- Compared to its closing price of one year ago, RNOW's share price has jumped by 80.42%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.